U.S. antitrust enforcers are laying the groundwork for an offensive against the aggressive maneuvers of tech giants to dominate artificial intelligence, amid mounting concerns that a handful of companies could squash competition in the swiftly evolving technology.
The Federal Trade Commission and Justice Department have reached a deal that would set the stage for antitrust probes into Microsoft, OpenAI and Nvidia, setting up unprecedented regulatory scrutiny of the companies’ conduct in the AI race, according to a person familiar with the matter, who spoke on the condition of anonymity to discuss a probe whose details are not public.
The deal — which is expected to be completed in the coming days — ends a long-running stalemate between the agencies over how they should divide up oversight of artificial intelligence companies, a debate that has limited the federal government’s ability to respond to the fast-changing corporate landscape.
Under the deal, the DOJ will investigate the conduct of Nvidia, which has wielded its advantages in making AI chips to become the second-largest publicly traded company in the United States. The FTC will take the lead on investigating the behavior of Microsoft and OpenAI, the maker of the popular ChatGPT chatbot.
The FTC also opened an investigation into whether Microsoft designed its $650 million deal with the AI company Inflection to skirt government antitrust reviews, the person said.
As part of the deal, Inflection AI CEO Mustafa Suleyman and many other employees joined the Redmond, Wash., tech company. Under federal laws, companies are required to report mergers of more than $119 million to federal agencies, and the FTC is investigating whether Microsoft intentionally structured the deal to avoid such a review.
“Our agreements with Inflection gave us the opportunity to recruit individuals at Inflection AI and build a team capable of accelerating Microsoft Copilot,” Microsoft spokesperson Becca Dougherty said. “We take our legal obligations to report transactions under the HSR Act seriously and are confident that we have complied with those obligations.”
Nvidia and OpenAI declined to comment.
The New York Times first reported the agreement between DOJ and FTC, and the Wall Street Journal first reported the FTC’s probe of Inflection.